The annual salary required to secure an average rental property in London has reached £74,520, according to new data from Propertymark’s latest rental price tracker.
The increase follows a 4.2% month-on-month rise in average rents across the capital, climbing from £2,385 to £2,484. This represents a 6.4% year-on-year increase in the representative salary needed to meet standard affordability requirements used by referencing agencies.
Regional variations
London recorded the strongest monthly rental growth among UK regions last month. The North West saw the second-largest increase, with average rents rising 1.9% from £1,110 to £1,131, pushing the required annual salary from £32,700 to £33,930.
Wales bucked the trend, recording the largest monthly rental decline at 0.9%, with average rents falling from £1,009 to £1,000. The region was among the few to see improved affordability year-on-year, with the representative salary requirement dropping 1.7% to £30,000.
Monthly rental increases were also recorded in the West Midlands (1.7%), the South East (0.8%), and Scotland (0.2%). Declines occurred in the North East (0.9%), the South West (0.7%), the East Midlands (1.1%), the East of England (0.2%), and Yorkshire and Humberside (0.1%).
National picture
Across Britain, the average monthly rent currently stands at £1,544, representing a 2.8% monthly change and 1.7% annual change. The average annual salary needed to rent nationally is £46,320.
The figures come as the rental sector faces ongoing challenges with tenancy fraud exposing the sector to significant risks, while leasehold properties face their own market pressures.
Kim Lidbury, President of ARLA Propertymark, said: “The latest figures show that rental markets continue to vary considerably regionally. While it’s encouraging to see year-on-year rental growth moderating compared with the sharp increases seen in recent years, the underlying challenge remains unchanged.”
Lidbury noted that demand for privately rented homes continues to significantly outstrip available supply, meaning rents remain historically high despite slower rates of growth. She added that without more quality homes entering the sector and policies supporting landlord investment, tenants are unlikely to see meaningful reductions in rental costs.
Market implications
The data analysed average agreed rental prices alongside typical annual salary requirements used by referencing agencies across various regions. The salary thresholds reflect standard affordability assessments used by letting agents and landlords when vetting prospective tenants.
For property investors, the rising rental values in London and the North West indicate continued strong demand, though regional disparities suggest varying opportunities across the UK market. The moderation in year-on-year growth rates may signal a stabilisation following the sharp increases of recent years.
